Recently increasing research efforts have been devoted to converting syn-gas (CO/CO.sub.2 /H.sub.2) to methanol and isobutanol mixtures for use as raw materials in methyltertiarybutylether synthesis (MTBE). Prior art catalysts consisted of modified methanol synthesis catalysts, such as mixtures of manganese, chromium, and (zinc) oxide promoted with alkali (Mn(Zn)O/Cr.sub.2 O.sub.3 /alkali) operated at high temperatures, and alkali promoted copper and zinc oxide (Cu/ZnO/alkali) operated at low temperatures. Keim et al., Catalysis Letters, 3, 59, 1989, describe a palladium supported on a coprecipitated manganese, zinc, zirconium, lithium oxide (ZrO.sub.2 --ZnO--MnO--Li.sub.2 O--Pd) catalyst which is highly active and selective for a one step synthesis of isobutanol. What is needed in the art is a catalyst capable of selectively producing methanol and isobutanol mixtures from syn-gas at lower temperatures (e.g. 290.degree.-360.degree. C. vs. 400.degree. C.) and pressures (50 atm vs. 100-250 atm).